Asset Management Not Wealth Management

ASSET MANAGEMENT ≠ WEALTH MANAGEMENT

Asset Management and Wealth Management are often used interchangeably but what is essential to understand is the difference between them. While both services target to impact your financial services positively, the scope of their services varies greatly.

As its name suggests, asset management is the management of your assets. Asset management aims to grow your current pool of assets while mitigating the risks taken.

Wealth management encompasses asset management. The goal of wealth management is to protect you and your family’s wealth, which involves legacy and tax planning.

Key Differences Between Financial Planning, Asset Management & Wealth Management

 Asset ManagementWealth Management
MeaningManagement of assets of clientsManagement of all financial aspects of the client
Focus

Narrow Approach

Focused on building your investment portfolio

Wide approach

Focused on protecting your family’s wealth involves tax planning. 

FunctionManagement of investments/assets, risk-return legacy analysis, strategy formulation for asset management, identification of “suitable” assetsManagement of investments/assets & portfolios, tax planning, estate planning, insurance, education planning, retirement planning, charitable contribution
Approach

Offer products “suitable” for the client

Creative approach to offer in-house products through their financial expertise and direct involvement in the market

Required (“fiduciary duty”) to put client’s interest before self

Process-driven approach involving coordination of inputs from financial experts, lawyers, accountants, insurance agents and other specialists required for financial management

Compensation

Usually, a commission is based on product sales. 

May give rise to a conflict of interest

Retainer fee-based along a fee for the asset under management 

Favours impartiality in recommendations

Typical service providersBankers (Privilege & Private); External Asset ManagersExternal Asset Managers; Investment Advisers
Typical AUM From S$1million upwardsFrom S$10million upwards
Which approach is most suited for you?

There isn’t a one-size-fits-all solution.

At different milestones in your life, you will have set out different goals that you set out for yourself. While both approaches are targeted at positively impacting your financial situation, their suitability depends on your personal needs.

A wealth manager will be able to help you boost the efficiency of your monies, gain insights into estate planning and reduce tax on family assets.

On the other hand, if the only thing you require at the moment is expert investment advice, then asset management might be the better solution.

Working with asset/wealth managers can be a great way to improve your financial situation. They can help you grow your investments. Not all asset/wealth managers are the same. Who can you trust?

First, you should check to see if they are regulated, as all individuals providing financial services in Singapore are required to be regulated. Examine their credentials, including their experience and track record. While past performance does not guarantee future results, it is a good indicator of whether they will work for you. Other considerations would be the availability of portfolio valuation reports, transparency, and competitive fees.

The most crucial step is meeting with a few different managers to determine which one is the best fit for you. You should feel comfortable with your manager and confident they have your best interests at heart.

When managing your finances, it’s essential to get the right advice. If you’re unsure whether you need to hire an asset manager or a wealth manager, speak to us via video consultation via Lawyer Anywhere. We can discuss your needs and recommend the best solution for you.

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Susan Tan

Senior Legal Executive

Qualifications:

With more than 10 years of experience in the financial industry, Susan Tan, who joined us from one of the leading corporate and investment banks in Singapore, provides invaluable expertise and knowledge in corporate secretarial.

She is conversant and familiar with the local regulations and requirements for business entities in Singapore.

As a member of our team, Susan is responsible for maintaining and updating the Company’s statutory registers and records, filing all necessary documents and forms with the Accounting & Corporate Regulatory Authority (ACRA), Ad-hoc assignments such as allotment and transfer of shares, amendment of Company’s Constitution and submission of Annual Return to ACRA.

Apart from corporate secretarial work, Susan has considerable experience and expertise in compliance advisory matters, making her a valuable member of our firm.